Towns scramble for barge service

Alaska Outport shuts down, leaving cities looking for way to bring goods in

Posted: Thursday, February 15, 2001

By MIKE SICATHE JUNEAU EMPIRE

The shutdown of a barge company that served Southeast Alaska for 38 years is affecting schools, hardware stores and cold storage plants in many of the region's small towns and villages.

Pelican Mayor Kathie Wasserman said air carriers and the ferries, which arrive about once a month, are alternatives that are either expensive or untimely.

"We depended on the barge for everything, from groceries to hardware, from city business equipment to small business materials, from boats to building materials," Wasserman said.

Pelican and other towns are arranging for alternatives due to the shutdown of Alaska Outport Transportation Association. The nonprofit barge corporation went out of business in November, citing rising fuel costs and declining outbound goods to ship such as frozen seafood and dimensional lumber.

"We shut the doors and had an auction to sell everything off in mid-December," AOTA president Jim Ferguson said from his Seattle office.

Alaska Outport shipped items from cars to groceries north from Washington, then returned south with Alaska products.

Ferguson blames the changing Southeast market for the demise of his business, a cooperative association of shippers connected to the small towns.

He said the creation of individual fishing quotas allows for a longer season, resulting in fresh seafood replacing frozen products his company shipped. He also said the decline in the timber industry means less dimensional lumber. Competition from national chain stores such as Costco, Kmart and Fred Meyer also hurt.

"People are shipping more from Juneau, rather than bringing goods up from Seattle," Ferguson said.

The decrease in business, particularly on the outbound runs known as back-hauls, was compounded by rising fuel costs last fall. Alaska Outport could not afford to keep its final sailing date, leaving cities such as Pelican without barge service since late October.

That hurt Pelican Seafoods, which handles salmon, halibut and cod.

"It had a huge impact on us in November," said Steve Pringle, manager of the cold storage plant that employed 22 people when it shut down a month early due to the lack of barge service. "We had all kinds of boats willing to deliver halibut and cod that had to go elsewhere because you can't buy something you can't ship."

Pringle was in Seattle on Tuesday, striking a deal to have Alaska Marine Lines come to Pelican. The first AML barge is set to arrive March 23.

While Pringle expects rates to be comparable to Alaska Outport - or even lower - others are not so sure.

"It's hard for me to tell because I've only been here since July but from what people say, things will be more expensive," said Kake School Superintendent Eric Gebhart.

The school district and its 166 students depend on barges for building and school supplies as well as groceries for breakfast and hot lunch programs. Gebhart said the school has switched to AML.

Like Kake, Hoonah has been served by both barge companies.

Harbormaster Paul Dybdahl said the Outport barge arrived about once every three weeks.

"They were valuable for the small towns," he said. "They hit every little place that the bigger outfits didn't."

The tires, truck parts and road culverts he used to see on Alaska Outport now come in on Marine Line barges.

AML already serves many of the same Southeast towns and villages. The big difference: Alaska Outport transported goods on pallets, which can carry smaller volumes, while AML uses containers, which require larger volumes as well as transfer facilities.

Don Reid, an AML vice president in Juneau, does not expect much problem in the transition for new customers. He said it's hard to compare rates.

"A lot depends on the products and the quantities," he said. "The rates may not be higher if you're shipping the same volume with us."

At least two communities have made arrangements with another company.

Snyder Mercantile, a general store in Tenakee Springs, has contracted with Western Pioneer Shipping Services of Seattle, which has been serving Kodiak and Dutch Harbor for more than 20 years.

Owner Barb Scanlan expects a barge by April.

"We're not as worried as some communities because we only need a barge four or five times a year," Scanlan said. "The rates seem pretty comparable to Alaska Outport, so I think we'll be fine."

Western Pioneer will also provide a direct monthly connection to Gustavus.

K&W Trucking of Gustavus, owned by John Scott, said Western will bring in about 90 percent of the freight from Seattle.

"It includes all of the supplies the community requires, from building materials and groceries to fuel, vehicles and boats," Scott said.